All about NAFTA

NAFTA HATERS SPEAK OUT: As of Sunday, nearly 500 interest groups and individuals had filed comments regarding President Donald Trump’s decision to renegotiate NAFTA ahead of today’s deadline for submissions. To be sure, many supported modernizing and strengthening the 23-year-old agreement, but others urged Trump to do a beeline out of the pact.

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“Rip up NAFTA! Get US out!! Do not renegotiate this abomination. Withdraw the US completely from it,” Mark Griffin from Andover, Minnesota, said. In Tallassee, Alabama, Fred Fuhrer of the John Birch Society expressed a similar view: “NAFTA should not be ‘re-negotiated’ at all. NAFTA should be thrown out.”

“Are you quite mad?” Diane W. from Santa Rosa, Calif., asked in her letter to U.S. Trade Representative Robert Lighthizer. “NAFTA is NOT for the American (or Mexican) workers! It's Cheap labor in other Countries that means more Profit for the companies and the hell with the workers.”

Several commenters view NAFTA as a first step toward a global government.

“President Trump must fire the globalists in his administration, who are pushing him to ignore his constituents and betray his campaign promise,” William Murphy of Gaston, South Carolina, advised. The Trump administration could be an for interesting public hearing on June 27, if sentiments like these prevail.

It wasn’t all gloom for NAFTA. This weekend, German Chancellor Angela Merkel, who was visiting Mexico, lent her support. Speaking during a visit to Mexico alongside President Enrique Peña Nieto, Merkel said she was pleased that NAFTA’s signatories — the U.S., Canada and Mexico — were planning to update the deal. President Donald Trump has repeatedly attacked Germany and Mexico over their trade surpluses, vowing to withdraw the U.S. from NAFTA if his country cannot get a better deal. Subscribers to POLITICO Europe can read the details here.

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IT’S MONDAY, JUNE 12! Welcome to Morning Trade, where your host is thinking of everything from maple syrup to maquiladoras as the final NAFTA comments come in today. Got any good tips to get us started this week? Let me know: abehsudi@politico.com or @abehsudi.

GERRISH ON DECK FOR DEPUTY USTR: The White House announced over the weekend the nomination of Jeffrey Gerrish to serve as deputy U.S. Trade Representative. He is the first high-level appointee to the trade agency since USTR Robert Lighthizer was confirmed last month. The post will put Gerrish, a longtime Washington trade attorney, in charge of a portfolio covering Asia, Europe, the Middle East and industrial competitiveness.

Gerrish will be a familiar face to Lighthizer. Both came from the law firm Skadden, Arps, Slate, Meagher & Flom LLP, where their practice primarily focused on representing domestic industry, most notably U.S. steel companies, that petitioned for tariffs against foreign competition. The White House said Gerrish has “extensive experience” litigating trade disputes at the Commerce Department, U.S. International Trade Commission, federal courts, NAFTA binational panels and the Word Trade Organization. Gerrish also serves as a member of rules advisory committee for the U.S. Court of International Trade.

The appointment leaves two other deputy slots open in USTR’s top ranks, including the U.S. envoy to the WTO in Geneva.

LAWMAKERS PRESS MNUCHIN TO BLOCK ALUMINUM DEAL: As Commerce Secretary Wilbur Ross considers whether to recommend restricting imports of steel and aluminum based on national security grounds, a bipartisan group of House lawmakers are using a similar tactic to urge Treasury Secretary Steven Mnuchin to block Chinese-owned company Zhongwang USA LLC from buying Cleveland-based aluminum manufacturer Aleris Corp.

“After repeated congressional, industry and workforce concerns that the acquisition of this aluminum company by a Chinese firm would be detrimental to our nation’s security, it has become abundantly clear that CFIUS must reject this transaction,” the lawmakers said in a letter sent Friday to Mnuchin, referring to the Committee on Foreign Investment in the United States, an interagency panel led by the Treasury Department.

Zhongwang announced plans to buy the Cleveland-based firm nearly one year ago for $1.1 billion, subject to approval by U.S. authorities. A bipartisan group of senators wrote in November to then-Treasury Secretary Jack Lew to express their uneasiness with the merger going through.

The House lawmakers, in their recent letter to Mnuchin, said the sale to Zhongwang must be blocked because Aleris produces many “specialized alloys with uses ranging from defense-grade armor to aerospace and critical infrastructure applications.”

“Chinese entities, including state-owned or state-controlled enterprises, often maintain maintain relationships with China’s military, compounding the risk that U.S. technologies will fall into the wrong hands,” the lawmakers said. The letter was led by Reps. Dave Loebsack (D-IA) and Tom Emmer (R-MN) and signed by 27 other House members.

Aleris revealed in a filing with the Securities and Exchange Commission in February that CFIUS had expressed “national security concerns” and urged the companies to withdraw and refile a modified request.

The companies took that advice and also extended the termination date for their merger agreement until Aug. 31 to give CFIUS time to finish its extended review, according to another SEC filing made last month.

CORNYN CFIUS BILL COMING SOON: Senate Majority Whip John Cornyn hopes to soon introduce legislation to direct CFIUS to focus more attention on transactions that transfer leading-edge technology to countries, such as China, that may wish to do harm to the United States, a spokeswoman for the Texas Republican said.

Cornyn is putting the finishing touches on a bill that would direct the interagency panel to maintain a list of “countries of special concern” that pose a potential threat to U.S. national security in order to increase scrutiny on any entities from those countries that seek to invest in a U.S. company, the spokeswoman said.

The proposed bill would also expand the types of transactions that fall under CFIUS jurisdiction, including technology joint ventures, as well as real estate transactions close to military bases and other sensitive national security facilities, she said.

CORNYN ALSO EXPRESSING CONCERN ON ALUMINUM: It’s also worth noting that Cornyn pressed the Aluminum Association in April for its position on the threat posed to U.S. domestic industry by China’s excess production capacity.

In the group’s response, AA President Heidi Brock stopped short of calling for national security curbs on aluminum imports. But she did note that without action by China to bring its domestic production in line with global demand and market forces, “the negative impact of expanding Chinese capacity on the U.S. aluminum industry, its workers and the U.S.-China trade deficit will continue to increase.” An AA spokesman said the group would file more extensive comments as part of the Section 232 national security probe now underway.

LAWMAKERS PITCH CUBA RELATIONS AS NATIONAL SECURITY MATTER: A group of House lawmakers is urging the Trump administration not to undo some of former President Barack Obama’s actions to normalize relations with Cuba. Reps. Tom Emmer and Rick Crawford, two outspoken proponents of boosting ties to Cuba, led seven lawmakers in writing a letter warning that that failing to engage the island nation would open the door for traditional U.S. adversaries like Russia and China “to fill the vacuum in our own backyard.”

“Allowing this to happen could have disastrous results for the security of the United States,” they wrote. “We urge you to prioritize U.S. national security and not return to a policy of isolation that will only serve to embolden adversarial foreign power in the region.”

Stay tuned for more on Trump’s Cuba policy this week. The president travels to Miami on Friday, where he is expected to announce that he will tighten some restrictions on those who travel to and do business with Cuba. This would fulfill a campaign promise he made to reverse historic changes Obama made more than three years ago when he removed decades of diplomatic and economic barriers between the two countries, POLITICO’s Mark Caputo and Sergio Bustos report.

“The specifics of Trump's executive action aren't yet clear, according to sources familiar with the administration's discussions. But it's expected to bear the stamp of two pro-embargo anti-Castro Miami Republican hardliners, U.S. Sen. Marco Rubio and U.S. Rep. Mario Diaz-Balart, who helped advise the White House and national security officials.”

Proponents of a more open Cuba policy turned the spotlight on Trump’s dealings with other hardline governments including those of Egypt, Turkey and the Philippines.

"We're hopeful that a dramatic campaign style event in Miami is more of a symbolic gesture to appease two Cuban American members of Congress, rather than an unveiling of substantive changes to policies that are supported by a bipartisan majority of Congress and the American people,” James Williams, president of the Engage Cuba Coalition, which advocates normalizing trade and travel ties with the Caribbean island nation, said in a statement.

His group released a study earlier this month that found reversing the Obama administration’s Cuba policies would cost the U.S. economy $6.6 billion and affect 12,295 American jobs over the course of the first term of the Trump administration.

NEW TARIFF EXEMPTION PROCESS OFF TO THE RACES: Import duties on 1,719 chemical, machinery, textile and other product lines could be waived under a new Miscellaneous Tariff Bill process. The U.S. International Trade Commission made the preliminary recommendations to Congress on Friday.

Last year, Congress changed the process for constructing the bill to require companies to make their requests for tariff waivers to the ITC instead of to members of Congress. That was done because some lawmakers consider the tariff waivers a violation of the House Republican ban on spending earmarks.

Chemicals accounted for nearly 1,500 of the petitions that received preliminary approval. Textiles, apparel and footwear made up another 459 petitions while machinery and equipment made up 457, the ITC said.

The ITC rejected applications for 763 other imported items that petitioners had requested. The ITC said companies whose petitions were rejected can provide more information, beginning on Monday, on why their waiver requests should be included. The ITC will submit its final recommendations to Congress by Aug. 8.

INTERNATIONAL OVERNIGHT

— A culture clash is happening between American workers and the Chinese company providing jobs at an abandoned G.M. parts factory outside Dayton, The New York Times reports.

— Minnesota has little to complain about in a NAFTA redo, the Minneapolis Star Tribune reports.

— Merkel says the digital world needs global rules like those at the G20 and WTO, Reuters reports.

— Defense Secretary Jim Mattis quietly keeps his distance from Trump’s most divisive decisions, The New York Times reports.

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About The Author

Adam Behsudi is a trade reporter for POLITICO Pro.

Prior to joining POLITICO, he covered international trade policy for Inside U.S. Trade, where he tracked down the latest news on the Trans-Pacific Partnership from exotic locales such as Auckland, New Zealand; Kota Kinabalu, Malaysia; and Leesburg, Va.

Before writing about anti-dumping, export controls and other trade subjects, Behsudi covered city hall for the Frederick News-Post. He got his start in journalism chasing crooked sheriffs and other crime-related news in the mountains of western North Carolina for the Asheville Citizen-Times.

Behsudi earned his bachelor’s degree in 2005 from the University of Missouri. With the hope that journalism could return as a growth industry within his lifetime, he earned a master’s degree in interactive journalism from American University in 2010.